As we previewed in our last update, HMRC has provided a further statement on live corporate criminal offence investigations concerning the failure to prevent the facilitation of tax evasion.

The headlines of the update are that as at 31 July 2020:

  • "HMRC currently has 10 live CCO investigations. Since December 2019, 1 new investigation has been opened. No charging decisions have yet been made
  • A further 22 live opportunities are currently under review. Whilst this represents an increase of 1 since December 2019, in reality opportunities continue to be referred, monitored and reviewed which will have changed the make-up of this list;
  • These investigations and opportunities span 10 different business sectors, including financial services, oils, construction, labour provision and software development;
  • Specifically, 12 investigations or opportunities relate to businesses in the financial sector – the part of the UK economy which provides financial services to commercial and retail customers; and
  • All of the investigations and opportunities sit across all HMRC customer groups from small business through to some of the UK’s largest organisations."

With this update HMRC demonstrated its ongoing commitment to investigate and pursue tax evasion by large and small businesses across a wide range of sectors, albeit we are starting to hear messages focussing on higher risk sectors such as financial services. It's clear that the COVID-19 pandemic has not impacted on HMRC's commitment to combat tax evasion.

In the event that a company is found guilty of a failure to prevent offence they may be subject to an unlimited financial penalty and/or ancillary orders such as confiscation orders or serious crime prevention orders. However, organisations can avoid criminal liability if they are able to demonstrate that they had reasonable procedures in place to prevent the commission of the offence.

For now there is no shortage of work for HMRC to be getting on with. It will be interesting to see how it balances the competing priorities of investigating the corporate crime offence, furlough fraud and the bounce-back loan scheme fraud in the coming months. We will continue to monitor HMRC's progress and keep you updated.

Please get in touch with a member of the team if we can assist you with any of the issues discussed in this update.